Infrastructure spend is under pressure. A budget deficit of 8.4 per cent of GDP means funds are scarce and must be used efficiently.
Meeting challenging growth targets with limited capital means smarter and more focussed procurement. The Government’s priority is removing bottlenecks in New Zealand’s broadband, transport and electricity infrastructure, as well as providing schools and other social infrastructure.
The population base growth and relocation is driving need for investment in transport infrastructure – both road and rail. Industries critical to the economy such as dairy, forestry and tourism also rely on efficient transport networks to fuel economic expansion.
Accordingly, Government has provided a further $250m to fund KiwiRail’s 10-year turnaround plan and spending continues on ‘Roads of National Significance’. Likewise, ensuring New Zealand is technologically equipped and globally connected to compete on the world stage is a priority, and the strong commitment previously indicated through the investment in Ultra-Fast Broadband and Rural Broadband initiatives continues with $942m included in the Budget.
Where the private or voluntary sectors have capital, knowledge and expertise in infrastructure delivery and management then a focus will continue on procurement methods to utilise this expertise and challenge the status quo.
The water sector is a good example. The Government has indicated a desire to partner with rural communities to get water infrastructure up and running. $35m has been set aside for an Irrigation Acceleration Fund to support the development of irrigation infrastructure proposals.
This is expected to unlock economic growth potential in a future of rising global food prices, with consideration of up to $400m being made available to invest alongside the private and community sectors in future years.
The availability of quality housing continues to be an economic constraint. Reform of the housing sector is expected to continue apace. The state housing portfolio represents the second largest Crown asset. Understandably, getting greater value for money from the $15bn invested is a priority.
The focus is on nurturing the community housing sector to complement and support Housing New Zealand Corporation. $45m has been tagged for this.
The National-led Government’s targeted infrastructure spending will prioritise removing the bottlenecks to future economic growth and facilitate partnerships with communities and the private sector to increase the total investment in New Zealand.